Featured speakers include Phil Wilson, the executive director of the Texas Department of Transportation; Gordon Bethune, the former CEO of Continental Airlines; Texas Secretary of State Hope Andrade; and Deirdre Delisi, the former chairwoman of the Texas Transportation Commission.

Rep. Darby gets things started on a gloomy note. He says Texas has no more ability to borrow money for new roads and the current income stream (the gas tax) hasn't kept up. Texas has issued $17 billion in debt for transportation since 2001, he said.

“We don’t have enough money to cover the roads in their current condition," Darby said.

Rep. Phillips is emphasizing the problem of diversions, gas tax money that goes to things other than road construction. It's become common practice for lawmakers to decry the gas tax diversions, even though they pay for things that need to be funded like the Department of Public Safety and the Department of Motor Vehicles.

“We as leaders have to communicate to the Legislature exactly what we’re looking at so we can get past the diversion issue and get to the next step and identify opportunities," Phillips said.

Watson said it's an issue of political will.

“Everyone seems to be in agreement that we need to quote stop the diversions," Watson said. "It’s just no one has the political guts to do it.”

Rep. Darby recalled a study he and Rep. Phillips commissioned two years ago. It found that Texas traffic, on average, costs every household $1,500 a year on waste of fuel and time stuck in traffic. That cost jumps to $5,300 per household by 2030 if the funding system doesn't change, he said.

"The question became how much can we invest in transportation infrastructure today to bring down that cost curve," Darby said. A $60 increase in teh vehicle registration fee would bring down that 2030 cost to $2,700, he said.

Sen. Nichols and Rep. Phillips have a disagreement of sorts on what qualifies as a diversion of transporatation funding. Nichols notes the millions that go to fund the Department of Public Safety. Phillips disagrees that that counts as a diversion, noting, for instance, that DPS monitors vehicle inspections.

“We’re going to have to get that diversion thing put to bed," Phillips said. Until then, finding a new approach to transportation funding won't be possible, he said.

Rep. Darby says the Farm-to-Market road system in Texas is in need of a lot of expensive repair work. The state is responsble for about $1 billion of that work. County governments are responsible for another $1 billion.

Nichols offers his proposal to pass a constitutional amendment dedicating the sales tax from vehicle purchases toward road funding, to be phased in over a decade. While the revenue would be minimal at first, he said the Texas Department of Transportation would be able to book perhaps $11 billion in road work very quickly because the agency would know that more money was on the way.

Rep. Phillips said he believed the House could get behind that proposal, as it would not be viewed as a tax increase.

Ross Ramsey asks the panel about Gov. Perry's Budget Compact, a document he released this year that called for no new taxes and controlling spending growth. Ramsey asked whether that precluded any fee increases for transportation funding, such as an increase in the vehicle registration fee.

Bethune described what Sept. 11, 2001 was like for him at Contintental Airlines board meeting in Houston. The board watched the second tower fall on TV. The airline had 158 planes in the air and wasn't certain that none had been hijacked.

“Until we counted down that 158 were safe, we didn’t know," Bethune said. "Everyone had to land wherever the nearest airport was.”

Bethune says he wouldn't have merged Continental Airlines with United Airlines, if he had still been in charge. Continental Airlines' sterling reputation was too valuable and United Airlines' lesser reputation may drag it down, he said.

“I tried to merge with United but they wanted to run the company. I said ‘Hell you can’t run water,'” he said.

Bethune brought up the council while talking about its recent decision to allow Southwest Airlines to host international flights at Houston Hobby Airport, even though George Bush International Airport is nearby. A city like Houston having two international airports doesn't make sense, he said.

Southwest "conned the Houston City Council into letting them fly from Hobby," Bethune said.

He predicted the move will lead to the city's overall decline and he made clear that Houston's city leaders didn't think the decision through properly.

‘The people on the Hosuton City Council, they use slip-on shoes because tying your laces is difficult," Bethune said.

Smith asked Bethune if airlines killed high-speed rail in Texas. He said high-speed rail is a bad bet for Texas, noting that Amtrak loses millions of dollars serving the Northeast. Commuter flights will always be more competitive than rail in Texas.

“That’s not the best way to invest your money," Bethune said. "You have high-frequency transportation that’s really dirt cheap. At the end of the day, who can afford to buy those [rail] tickets? No one."

Aman's panel is up and running on The Future of Trade. They're talking border enforcement, traffic and such with Gene Garza, with the Department of Homeland Security, Nelson Balido of the Border Trade Alliance, Esther Rodriguez Silva of Texas A&M's Latin American Initiatives, and Texas Secretary of State Hope Andrade.

Silva is talking about how trade is conducted and about the balance of trade. Says we have to motivate U.S. distributors to export. Local distribution channels in some of the countries to which we export, she says, are not well developed.

Border communities are so different, with three million trucks coming through, Andrade says. "It doesn't mean that they're getting more money." Arizona gets more money than Laredo. "How do you justify that?"

Is the Panama Canal expansion a big deal for Texas? Garza: The ports in Mexico are seeing an increase, the Texas ports are seeing some of it already (he's talking about inland ports — road and rail traffic).

Panama will have an impact on volume and size both, Silva says. She's talking about the increased loads on roads in the U.S. Some ports are making improvements to infrastructure in advance of that trade.

Garza says it's not. They have the Mexican Army there, working alongside the customs officers. "We have not really seen any effect" on trade, though he says a lot of downtown stores and restaurants along the border have been affected.

Heiligenstein pointed to Dell's decision to move a plant to Tenessee from Round Rock. He said Dell executives told him that the decision to pick Tenessee "primarily because of congestion not being addressed" in Central Texas.

Carona talked about a local option measure, in which communities like Dallas-Fort Worth or Houston raise local fees to pay for local transportation projects. He acknowledged it's not likely to pass in the Legislature any time soon.

Delisi said her concern about local-option plans is that it would lead to the public thinking the transportation problem is solved, when no money will have been raised for expanding rounds connecting the state's largest cities.

“If you can’t get from Houston to Dallas, our transportation system is going to suffer," Delisi said.

Panelists got into a spirited debate about toll roads. Heiligenstein said the Austin area is warming to toll projects and dynamic pricing in which a toll road’s price changes depending on the time of day and level of congestion.

Carona strongly disagreed.

“I think they embrace it because there isn’t an alternative,” Carona said. He suggested that too many toll road projects may be in the works. If drivers don’t have a choice but to take the toll road, the toll becomes a tax, he said.

The panel touched briefly on the Trans-Texas Corridor and how the failure of that project may have soured lawmakers on tackling transportation more forcefully.

Delisi said she was disappointed more people didn't credit Gov. Perry with pushing transportation, unusual in American politics over the last decade, into the forefront rather than criticizing his project.

"I would have been happier to see more people stand up and defend the emphasis on transportation," Delisi said.

A member of the audience asked about the importance of private equity in funding major road projects in Texas.

Carona said private equity money is "expensive" and that too often TxDOT leans on private equity money to fund a project when there are cheaper approaches. TxDOT is ignoring

“I think it has a role but we have to be very cautious," Carona said.

Delisis noted that the two of the largest road projects in the state, I-69 and I-35 corridor expansions, costs $12 billion. Private equity was needed for big-ticket projects like that to move forward, she said.

Things got personal at the end of the panel, as Carona accused Gov. Perry of politicizing the Texas Department of Transportation by appointing “cronies” to its leadership. He said Delisi, a former Transportation Commissioner, counts as one of those “cronies.”

Delisi said TxDOT's record over the last decade speaks for itself.

"One of the reasons txdot is ranked by CNBC as the best economy in the country is because of our infrastructure system," Delisi said.

We are about to get started with Is Light Rail the Answer? in the Trade and Transportation track. Moderator Ben Philpott of KUT-FM will be talking with Austin City Councilman Mike Martinez, DART Deputy Executive Director Jesse Oliver, and John Sedlak, manager of Rail Passenger Research at the Texas A&M Transportation Institute.

Oliver says light rail is still relatively new to Texas. What we've come to see are backside advantages, not only in its primary purpose, but what it creates in our cities, for people, for creating access.

Sedlak says cars have been our primary means of transportation, and it's difficult to reestablish public transit or rail transit in a place that's built for cars. For instance, we lack a lot of sidewalks in our cities — places to get to and to wait for public transportation.

Martinez points to a big suburban shopping center in Austin — Southpark Meadows — as an example. If you took public transportation there, you'd have to walk and walk to shop there. It's built for people in cars, with giant parking lots between the stores.

Martinez said Austin's existing rail was built for point-to-point runs on existing rail lines and right of way. Now the city wants to spend $550 million for 5 miles of urban rail. "That's more than $90 million for 32 miles of suburban rail, but that's different." He says the urban rail would be more heavily used, and would serve a different purpose.

What we see happening time after time is this debate over technology (monorail, buses, etc.). Transit officials have to view themselves as mobility managers, Sedlak says. It's a delicate balance that has to take place.

Oliver says DART is hearing from area cities that want to connect with its network. A pilot program with Mesquite is in the work.

“We’re talking to a lot of cities about it,” Oliver said. “You may be surprised that even Tyler which is 90 miles away is trying to connect to the Dallas system so they can get their people to DFW Airport.”